Can too much prosperity be a bad thing? When a product takes off, many young companies collapse because demand outstrips their capabilities. CPA Janis Monroe, the founder of software developer and publisher MicroMash, was able to weather this challenge and, using an accountant's instinct for good management, set her business on a path for continued growth.
FROM THE RIDICULOUS TO THE SUBLIME
Monroe was the chief financial officer of a retail concern for 15 years before she left to become a professor of accounting information systems at Sam Houston State University in Texas. In academia, "I became intrigued with the power of the computer for educational uses," she says. In the mid-1980s, she teamed with other professors to create software that would teach students accounting and help them prepare for the Uniform CPA Examination. Monroe started a company that would develop and publish the software and launched the product.
The initial reaction was underwhelming. "We were laughed at at all the trade shows," Monroe remembers. "They said the product was ridiculous. No one had ever tried to do this and no one thought it would work. As time went on, we crawled our way up the ladder. When you're ahead of your time and you're trying to break into a market, it's a long, hard climb."
The company's fortunes changed dramatically in 1990. The University of Texas at Austin was using the CPA exam review software for its students and, at an exam site near the university, the number of MicroMash users who passed the exam was way above the normal rate. As a result, the American Institute of CPAs and the Texas state board of accountancy investigated that site for cheating. It was determined that the students were innocent, and that the software was behind their accomplishments. "That made the company," Monroe says.
But such rapid success was a mixed blessing. At the time, the business employed nine people, including those in development. After the exam site investigation, "we suddenly went from 500 phone calls a month to 1,000 phone calls a day." Although Monroe welcomed the business, "it was a total management nightmare. We would place an order with our vendors at 9 a.m. and then sell the whole order by 10 a.m. The vendors weren't ready. The infrastructure wasn't in place."
Monroe says the company survived because she and her daughter, Elizabeth, who worked with her, refused to believe anything was impossible. To keep work flowing, employees were fed three...